Health Care Systems

Traditionally, decision makers both within and outside the health sector have thought of the value of health interventions primarily in terms of reduced morbidity or mortality. Health care, however, produces wealth effects outside the health care sector—for example, improvement in labour productivity for both patients and caregivers, cost savings in health and social care and other sectors, and an increase in national income.

The 2013 conference of the Association of the British Pharmaceutical Industry (ABPI) addressed the challenges and opportunities presented by the recent changes in the NHS. Understanding quality, and setting and meeting standards for quality, are essential going forwards. At the conference, OHE’s Adrian Towse reviewed the experiences and concerns that have shaped the approach to quality and identified critical components.

Advances in science and technology are producing more and better means for diagnosing disease, matching patients to the best therapies, and tracking the progress of treatment. The potential impact of using diagnostic and therapeutic tests in tandem with treatment—“co-dependent technologies”—potentially can maximise both treatment effectiveness and economic efficiency.

Performance-based risk sharing arrangements for prescription medicines and other treatments are attractive to payers because they promise to base what is paid for a treatment on whether/how well it actually works. Programmes typically include data collection and either implicitly or explicitly link pricing, reimbursement and/or revenue to what the data show.

OHE’s Koonal Shah is a co-investigator in research intended to define public preferences about allocating health care resources to patients who are at the end of life. In late March, OHE hosted a Lunchtime Seminar that examined both the approach and the results of research to date.

Medicines account for less than 10% of total NHS expenditure in the UK. Because spending on medicines is easy to separate out, however, this sector continues to come under particular scrutiny in efforts to manage costs. Forecasting spending on medicines can be useful in planning NHS resource allocation.

OHE’s Dr Jorge Mestre-Ferrandiz is a visiting lecturer in the Department of Economics at City University London. As part of his 2013 activities, he recently gave a comprehensive lecture on the economics of the market for medicines in the UK. His presentation covers the key issues, from drug development through health technology assessment and market access.

OHE’s Jon Sussex has studied and written extensively on competition in the NHS. He was a member of the OHE Commission on Competition in the NHS and rapporteur of its 2012 report. We asked him to comment on the latest NHS competition regulations. Last week the UK’s coalition government published a revised draft of regulations to govern competition among providers of health care funded by the NHS in England.

19 March: Jon Sussex will be at BioWales 2013 speaking on the health and wider economic benefits of life sciences research. 21 March: Jorge Mestre-Ferrandiz will give his updated annual presentation on the economics of the market for medicines at City College in London. 21/22 March: Nancy Devlin will be in Singapore with EuroQol colleagues. Until 12 April, OHE is accepting applications for a fixed-term position for an economist. Keep up with the latest!

Debates about whether to increase state assistance to the elderly have included concerns that this could reduce the amount of care from such personal caregivers, producing a limited net benefit. In a new research paper released today, OHE’s Sarah Karlsberg Schaffer undertakes a comprehensive analysis based on a “natural experiment”: the introduction of free personal care for the elderly that was implemented in Scotland in 2002, but not elsewhere in the UK.


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